Rai v. Headlight Health, Inc. et al

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
SANDEEP RAI, an individual,
Plaintiff,
v.
HEADLIGHT HEALTH, INC., a
Delaware corporation; SOKYAHEALTH
MEDICAL GROUP, P.C., a California
corporation; and DOES 1 through 20,
Defendants.
Case No.: 26-cv-00429-DMS-BJW
ORDER VACATING ORAL
ARGUMENT; GRANTING
PLAINTIFF’S MOTION TO
REMAND; and DENYING
PLAINTIFF’S REQUEST FOR
ATTORNEYS’ FEES
[ECF No. 5]
Pending before the Court is Plaintiff’s motion to remand this case to San Diego
County Superior Court (“State Court”) and request for attorneys’ fees. (Mot., ECF No. 5.)
Defendants Headlight Health, Inc. (“Headlight”) and SokyaHealth Medical Group, P.C.
(“SokyaHealth”) filed a response in opposition, (Opp’n, ECF No. 8), and Plaintiff filed a
reply. (Reply, ECF No. 10.) The matter is currently scheduled to be heard on Friday,
February 27, 2026, at 1:30 p.m. Because the matter is suitable for resolution without oral
argument, the Court vacates the hearing. S.D. Cal. Civ. R. 7.1(d)(1). For the following
reasons, the Court grants Plaintiff’s motion to remand and denies Plaintiff’s request for
attorneys’ fees.
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I. BACKGROUND
Plaintiff originally filed this action in State Court on December 22, 2025, (Notice of
Removal, ECF No. 1, at 1), alleging sex discrimination, interference with pregnancy
disability leave, failure to accommodate, failure to engage in the interactive process,
retaliation, violations of the California Family Rights Act, failure to prevent discrimination,
and whistleblower retaliation. (Compl., ECF No. 1-7, at 1.) On January 23, 2026,
Defendants removed the case to federal court pursuant to 28 U.S.C. §§ 1332, 1441, and
1446.1 (Notice of Removal 1.) Plaintiff now moves to remand to State Court and requests
attorneys’ fees incurred as a result of her motion.
II. LEGAL STANDARD
“Federal courts are courts of limited jurisdiction, possessing only that power
authorized by Constitution and statute.” Gunn v. Minton, 568 U.S. 251, 256 (2013)
(internal quotation marks and citation omitted). A suit filed in state court may be removed
to federal court if the federal court would have had original jurisdiction over the suit, based
on federal question or diversity of citizenship of the parties and an amount in controversy
that exceeds $75,000. See 28 U.S.C. §§ 1331, 1332(a), 1441(a). “[I]t is to be presumed
that a cause lies outside the limited jurisdiction of the federal courts and the burden of
establishing the contrary rests upon the party asserting jurisdiction.” Hunter v. Phillip
Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (citation modified) (citation omitted).
“The strong presumption against removal jurisdiction means that the defendant always has
the burden of establishing that removal is proper, and that the district court resolves all
ambiguity in favor of remand to state court.” Id. (citation modified) (citation omitted).
/ / /
/ / /
1 Because Defendants were served on December 22, 2025, (Notice of Removal ¶ 32), the removal deadline
was January 22, 2026. 28 U.S.C. § 1446(b). Defendants contend that they experienced technical
difficulties when filing the removal papers on January 22, 2026, causing them to file one day late. Under
these circumstances, the Court opts to rule on the merits of Plaintiff’s motion to remand.
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III. DISCUSSION
Defendants assert that the Court has diversity jurisdiction over this matter. (Notice
of Removal ¶ 34.) A state-court action can be removed on diversity grounds only where
there is complete diversity between the parties and the amount in controversy exceeds
$75,000. 28 U.S.C. §§ 1332(a), 1441(a). Courts evaluate diversity jurisdiction at the time
of removal. Kenneth Rothschild Tr. v. Morgan Stanley Dean Witter, 199 F. Supp. 2d 993,
1000 (C.D. Cal. 2002). “A court must assume that the allegations of the complaint are true
and assume that a jury will return a verdict for the plaintiff on all claims made in the
complaint.” Id. at 1001 (citation modified) (citation omitted). A civil action removable
solely on the basis of diversity jurisdiction “may not be removed if any of the parties in
interest properly joined and served as defendants is a citizen of the State in which such
action is brought.” 28 U.S.C. § 1441(b)(2).
A. Amount in Controversy
There is no dispute as to the amount in controversy. “When the plaintiff’s complaint
does not state the amount in controversy, the defendant’s notice of removal may do so.”
Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 84 (2014). “[W]hen a
defendant seeks federal-court adjudication, the defendant’s amount-in-controversy
allegation should be accepted when not contested by the plaintiff or questioned by the
court.” Lindsey v. WC Logistics, Inc., 586 F. Supp. 3d 983, 991 (N.D. Cal. 2022) (quoting
Dart Cherokee Basin, 574 U.S. at 87). The Complaint is silent as to the amount in
controversy. Defendants contend the amount in controversy exceeds $75,000, (Notice of
Removal ¶¶ 19–28), which Plaintiff does not contest. Thus, the Court finds the amount in
controversy requirement is met.
B. Diversity
To have complete diversity, Plaintiff cannot be domiciled in the same state as either
Defendant. 28 U.S.C. § 1332. “To be a citizen of a state, a natural person must first be a
citizen of the United States.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir.
2001) (citing Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828 (1989)). “The
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natural person’s state citizenship is then determined by her state of domicile,” which is “her
permanent home, where she resides with the intention to remain or to which she intends to
return.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001) (citation
omitted). Plaintiff is a citizen of Virginia and worked in Las Vegas, Nevada. (Notice of
Removal ¶ 12.) Neither party contends that Plaintiff is domiciled in Delaware, California,
Oregon, or Utah. Thus, the Court finds that Plaintiff is either domiciled in Virginia or
Nevada.2
For diversity jurisdiction purposes, a corporation is a citizen of “every State . . . by
which it has been incorporated and of the State . . . where it has its principal place of
business.” 28 U.S.C. § 1332. “By the plain wording of the statute, a corporation can have
only one principle place of business, though it could have multiple places of
incorporation.” Kazemy v. BMW of N. Am., LLC, No. 3:13-CV-02050-AC, 2014 WL
3667217, at *3 (D. Or. July 17, 2014) (citation omitted). A corporation’s “principal place
of business,” also called a corporation’s “nerve center,” refers to the “place where the
corporation’s high level officers direct, control, and coordinate the corporation’s
activities.” Hertz Corp. v. Friend, 559 U.S. 77, 92–93 (2010). “[I]n practice it should
normally be the place where the corporation maintains its headquarters—provided that the
headquarters is the actual center of direction, control, and coordination.” Id. at 93.
Both parties agree that Headlight is incorporated in Delaware. (Compl. ¶ 5; Notice
of Removal ¶ 14; Mot. 3.) Plaintiff alleges in her Complaint that Headlight is
headquartered in California. (Compl. ¶ 5.) Defendant contends that Headlight is
headquartered in Utah, not California, and therefore, is not a citizen of California. (Notice
of Removal 4.) Plaintiff does not dispute Defendants’ contention or otherwise argue that
2 This Court’s ruling is unchanged regardless of whether Plaintiff’s domicile is Virginia or Nevada. Thus,
the Court does not decide which of these states is Plaintiff’s rightful domicile.
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Headlight is headquartered in California. For these reasons, the Court finds that complete
diversity exists between Plaintiff and Headlight.3
However, the parties disagree whether SokyaHealth is domiciled in California. It
appears two companies named SokyaHealth Medical Group, P.C. exist—one incorporated
in Oregon, and one in California. (Opp’n 3; id., Ex. C (depicting business entity data from
the Oregon Secretary of State); Mot., Ex. A (depicting business entity data from the
California Secretary of State).) Plaintiff argues that she sued the California corporation.
(Mot. 3.) Defendants argue that Plaintiff “misrepresented” SokyaHealth’s citizenship in
the Complaint (which describes SokyaHealth as a “California corporation”). (Notice of
Removal ¶ 16.) Defendants also argue that the Oregon corporation was Plaintiff’s true and
sole employer and, therefore, the California corporation was “incorrectly named” as a
Defendant. (Opp’n 1, 3.) Defendant argues that because the California corporation is an
improper party, the California corporation should be dismissed. (Id. at 3.) Defendants
request that this Court use its discretion under Federal Rule of Civil Procedure 21 to “sever”
any claims against the California corporation, (Id. at 4), or, alternatively, remove the
California corporation under the “fraudulent joinder” rule. (Id.) The Court refuses to take
such action based on the current record.
A non-diverse defendant may be disregarded if that defendant has been “fraudulently
joined.” Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). “There are
two ways to establish fraudulent joinder: ‘(1) actual fraud in the pleading of jurisdictional
facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse
party in state court.’” Grancare, LLC v. Thrower by & through Mills, 889 F.3d 543, 548
(9th Cir. 2018) (citing Hunter, 582 F.3d at 1044). If there exists even a “possibility that a
state court would find that the complaint states a cause of action against any of the resident
defendants, the federal court must find that the joinder was proper and remand the case to
3 The Court does not determine whether Headlight is also domiciled in Utah because such a finding is not
necessary to rule on this motion.
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the state court.” Id. (emphasis in original) (citing Hunter, 582 F.3d at 1046). “A defendant
invoking federal court diversity jurisdiction on the basis of fraudulent joinder bears a
‘heavy burden’ since there is a ‘general presumption against [finding] fraudulent joinder.’”
Id. (emphasis added) (citing Hunter, 582 F.3d at 1046). Neither circumstance exists here.
Plaintiff alleged that SokyaHealth is incorporated in California, (Compl. ¶ 6), and there is
indeed a SokyaHealth incorporated in California. (Mot., Decl. of Calvin Chang in Supp.
of Pl.’s Mot. (“Chang Decl.”), Exs. A, C.) Defendants have not shown actual fraud in the
pleading of jurisdictional facts.
Additionally, assuming the two SokyaHealth Medical Group, P.C. entities are
separate and distinct corporations, Defendants have failed to sufficiently prove that the
Oregon corporation is Plaintiff’s true and sole employer (and, thus, there is no possibility
a cause of action can be asserted against the California corporation). The employment
agreement names Plaintiff’s employer as “SokyaHealth Medical Group, P.C.” with the
address of 5060 Shoreham Place Suite 100, San Diego, California 92122, (Id., Decl. of
Sandeep Rai in Supp. of Pl.’s Mot. (“Rai Decl.”), Ex. A, at 1)—the same address listed on
the California’s Secretary of State website and the California company’s Statement of
Incorporation. (Id., Chang Decl., Exs. A, C.) Plaintiff’s primary work location was San
Diego, California. (Id., Rai Decl., Ex. A, at 12.) Additionally, the two entities share
corporate officers. For example, Dr. Shashita Inamdar is listed as the Oregon corporation’s
president and secretary, (Opp’n, Ex. C), as well as the California corporation’s Chief
Executive Officer, Chief Financial Officer, and secretary. (Mot., Chang Decl., Ex. C.)
Emily Hawk, the recipient of the Internal Revenue Service’s letter assigning the Oregon
corporation its federal tax ID number, (Opp’n, Ex. D), is also the officer who signed
Plaintiff’s employment agreement. (Mot., Rai Decl., Ex. A, at 11.) Plaintiff also contends
that the employer address listed on her wage statements is SokyaHealth’s San Diego
address, (Id., Rai Decl., ¶ 3), and under California Labor Code section 226, an employee’s
wage statement must include “the name and address of the legal entity that is the
employer.” Cal. Lab. Code § 226(a).
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To prove that the Oregon corporation was Plaintiff’s true and sole employer,
Defendant argues that Plaintiff’s W-2 bears the federal tax ID number given to the Oregon
corporation. (Opp’n 2; id., Exs. A, B.) Defendant also argues that the address on Plaintiff’s
W-2 is “Salt Lake City, Utah, which is the headquarters of Headlight, who provides payroll
services for” the Oregon corporation. (Id. at 2.) This evidence does not satisfy Defendant’s
heavy burden, especially in light of Plaintiff’s contrary evidence. Thus, the Court declines
to disregard the California corporation as “fraudulent joinder.” The Court also declines to
invoke its discretion to sever the California corporation under Rule 21. See Cnty. of Mono
v. Liberty Utils. (Calpeco Elec., LLC), No. 221CV00834, 2022 WL 3368440, at *1 (E.D.
Cal. Aug. 16, 2022) (describing various reasons a court may sever claims under Rule 21).
Because the SokyaHealth entity that was sued is incorporated in California, complete
diversity does not exist and this action cannot be removed to the Southern District of
California.
Further, even if Plaintiff intended to sue the Oregon corporation, the Court finds that
the Oregon corporation’s principal place of business is in California. The Oregon
corporation lists a San Diego address as its principal place of business and mailing address.
(Opp’n, Ex. C.) Dr. Inamdar, the Oregon corporation’s incorporator, president, and
secretary, uses a San Diego post office box has her mailing address. (Id.) Further, in the
California company’s Statement of Information, Dr. Inamdar lists her address in San
Diego. (Mot., Chang Decl., Ex. C.) Plaintiff, who worked under the company’s
executives, asserts that the majority of SokyaHealth’s executives live and work in
California and the company’s executive and administrative functions are performed in
California. (Id., Rai Decl., ¶ 6.)
Accordingly, the Court finds that SokyaHealth is domiciled in California. The Court
therefore lacks subject matter jurisdiction. Plaintiff’s motion is GRANTED.
C. Request for Attorneys’ Fees
“An order remanding the case may require payment of just costs and any actual
expenses, including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c).
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“Absent unusual circumstances, courts may award attorney’s fees under § 1447(c) only
where the removing party lacked an objectively reasonable basis for seeking removal.”
Martin v. Franklin Cap. Corp., 546 U.S. 132, 141 (2005). Plaintiff argues that “Defendants
lacked any objectively reasonable basis for seeking removal” because “[a]t the time of
removal, Defendants knew or should have known that [SokyaHealth] was a California
corporation that had already been properly served.” (Mot. 7.) Thus, Plaintiff requests
$3,000 in attorneys’ fees for the amount incurred preparing her motion to remand and the
reply brief. (Reply 4–5.) Although the Court finds Defendants did not meet their burden,
Defendants provided some evidence that there are two SokyaHealth entities incorporated
in separate states and that the Oregon corporation is Plaintiff’s employer. The Court does
not find that Defendant lacked an “objectively reasonable basis” for seeking removal.
Plaintiff’s request for attorneys’ fees is therefore DENIED.
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Plaintiff’s motion to remand and
REMANDS this action to the State Court and VACATES the February 27, 2026 hearing.
The Court also DENIES Plaintiff’s request for attorneys’ fees.
Dated: February 23, 2026
________________________________
Hon. Dana M. Sabraw
United States District Judge
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